Local Government Pension Scheme – Changes from 1 April 2008
On 1st April this year the new Local Government Pension Scheme will take effect with a new set of benefits for members. Despite the impending start, there are still some areas that are not in an implementable state so this overview outlines the areas where there is clarity. All your pension earned up to 1st April will be paid in line with the old 1997 scheme rules (1/80 pension plus 3/80 lump sum). Benefits earned in the new scheme will then be added to this to form your total LGPS pension on retirement.
Contribution Bandings
Employee contributions will be set according to bands of full time equivalent pay. The contribution rates for scheme members will vary between 5.5% and 7.5%.
Band Pay Range Cont Rate
1 £0-£12000 5.5%
2 £12001-£14000 5.8%
3 £14001-£18000 5.9%
4 £18001-£30000 6.5%
5 £30001-£40000 6.8%
6 £40001-£75000 7.2%
7 £75000 + 7.5%
Pension Calculation
For all service from 1st April 2008, your pension at Normal Retirement Age will be based on this formula:
Length of service × Final Pensionable Pay ÷ 60 = Annual Pension
Lump Sum
There is no automatic lump sum but you can trade up to around 25% of your pension for a lump sum at a rate of £12 cash for every £1 annual pension given up.
Retirement Age
The Normal Retirement Age of the scheme is 65, however, you can retire before or after that age. Usually your pension would be reduced for early payment (see below) or increased for late payment.
Final Pensionable Pay
Normally final pensionable pay will be your pensionable salary in your last year of service. If your pensionable salary was higher in either of the two years before that then the highest salary will be used. If you have reduced your hours or grade then the figure may be the highest consecutive three year average pensionable salary in the ten years before retirement.
Flexible Retirement
If you reduce your hours or grade in the run up to retirement and your employer agrees, you can take flexible retirement. This allows you to take some or all of your pension and continue working until you wish to retire fully when you’d take the remainder of your benefits.
Early Retirement – Voluntary
Despite the removal of the Rule of 85 you can still choose to retire before 65. You need your employer’s consent if retiring before 60 but not if you are over that age. Your pension will be reduced on the grounds that it is being paid early. For a man retiring at 60 the reduction is 24% and for a woman 23%. If you were a member before October 2006 and would have been able to retire early under the Rule of 85 you may qualify for some transitional protection that limits the amount your pension is reduced for early payment.
Early Retirement – Redundancy/Efficiency
If you leave employment on the grounds of redundancy or in the interest of the efficiency of the service and you are over 55 (50 for members of the old scheme up to April 2010), then you are entitled to the immediate payment of your pension, unreduced for early payment.
Survivors’ Benefits
If you die in service, your dependent should be in line for a death in service lump sum of three times your salary. If you die within ten years of retiring then your dependent should receive a lump sum of the balance of ten years’ of pension less any already paid to the member. A similar rule applies to deferred members although it is the balance of five years’ pension paid in that case. Survivors’ pensions are also payable to spouses, civil partners and/or children.
Additional Pension
You can make additional pension savings either through AVCs or by purchasing additional pension directly. You can buy up to £5,000 per year additional pension in blocks of £250 which would then be added to your annual pension when you retire.
Ill Health Pension
There are new ill health arrangements in the new LGPS 2008 and enhancements will be awarded according to likelihood of obtaining gainful employment after retirement.
Thursday, March 13, 2008
Amicus in Higher Education Issue 29
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 Contents The end for national pay negotiations? Salary Sacrifice Schemes Recruitment and Retention Premium and Market Forces Pay Policies Future of engineering courses in doubt, say academics Unite evidence to the Innovation, Universities and Skills Committee’s hearing into the science budget allocation HEFCE and Salix launch fund to reduce greenhouse gases University forced to consult staff under information and consultation of employees regulations Applications fall as study options narrow Raising the Professional Profile of Technical/ Specialist Staff Watch Your Step in Education – HSE courses
Colleagues will have seen the press reports following UCU's ballot result rejecting single table bargaining and a streamlined negotiating process. AS previous Circulars from Mike Robinson indicated this could have an impact on the future of national negotiations. Read the link below for press speculation on this. The latest news is UCU are trying to get UCEA to meet and negotiate further but UCEA have issued its own press release saying the negotiations are now closed but UCU can join everyone else at the single table as the door is being “left open”. Click here to read UCEA's Press release and Briefing note: http://www.ucea.ac.uk/index.cfm/pcms/site.News.Latest_News_Release/ Report in the Independent: http://www.independent.co.uk/news/education/higher/the-end-for
Several institutions in the Higher Education sector have been developing Salary Sacrifice Schemes or Smart pension arrangements. This is an increasingly popular device to reduce the cost of pensions. Essentially, it involves employees' salaries being reduced by the amount of their pension contributions and those contributions instead being paid directly by the employer. There is now advice on university schemes on the Unite Amicus section website and also a page where you can find details of already agreed deals. Click here to find out more: If you are being offered a salary sacrifice scheme at your institution please let National Officer Mike Robinson know on Mike.Robinson@unitetheunion.com
There is a new section on the Unite Amicus section website with details about RRP and Market forces policies from various institutions. It is only accessible for workplace reps and branch sectaries:
Universities are losing money running engineering courses and cannot afford to update ageing equipment, academics warned today. The Engineering and Technology Board (ETB) and the Engineering Professors' Council (EPC) claim the sustainability and the future quality of teaching is under threat because of the imbalance between the amount of public funding universities get and how much it actually costs them to teach engineering. A study by JM Consulting commissioned by ETB and EPC looked at differences in the costs of four universities in England in 2005-06, covering a wide range of engineering disciplines. It found that equipment was often old and out of date and universities are increasingly depending on fees from non-EU students to make up the shortfall in funds. Both ETB and EPC are calling for the level of funding universities get by 14% from the Higher Education Funding Council for England (Hefce) to be revised to reflect the true costs of teaching engineering in universities. To read more in the Education Guardian click here: To read the study click here:
In response to cuts to physics grants Unite has submitted evidence to the Innovation, Universities and Skill's Committee on science budget allocations. Unite made it clear that these cuts would lead to unacceptable redundancies and course closures. The changes would have a major impact on the UK skills strategy and UK 's international physics standing in. Click here to read the submission:
Higher education institutions (HEIs) in England will benefit from a new fund to provide repayable grants for projects that reduce greenhouse gas emissions. This fund will be a partnership between HEFCE and Salix Finance Ltd (Salix) with both parties committing significant funds. HEFCE and Salix expect that there will be a combined total of around £30-40 million to distribute over the three years from 2008. http://www.hefce.ac.uk/news/hefce/2008/green.htm Also see further articles on the environmental performance of the HE sector here: Penalties on the cards for CO2 laggards Declare your footprint or face a fine from the EU
Bournemouth University is the UK 's first higher education institution to become subject to a law requiring businesses to give their staff greater access to financial information and to consult them over decisions. Under the Information and Consultation of Employees regulations, which came into force in 2005, staff have a right to be informed and consulted about key decisions likely to affect their employment. The law also entitles employees to information about their employer's economic situation. Universities are not automatically required to inform and consult; the duty is triggered only by a formal request from employees to negotiate an ICE agreement or by the employer choosing to start the process. To read more in the Time Higher click here: To read more about the ICE regulations click here:
New university admissions rules giving students a narrower range of course choices have left some universities facing a dramatic drop in applications for degrees starting in the autumn. The new system, designed to encourage students to think more carefully about where they want to study, means that applicants may choose a maximum of only five courses instead of the previous six. The sector had been warned that this could mean a potential drop in applications of about 17 percent, or a sixth. But 21 institutions have seen a fall in applications in excess of this figure, while 14 have run counter to expectations and increased applications (excluding small institutions with fewer than 1,000 degree applications). Overall, the average drop in applications was 9.2 per cent. To read more about the statistics in the Times Higher Education supplement click here:
(A one day joint HEaTED/IST Conference) Speakers/presenters Among the speakers already confirmed for this event are: John Perkins, (Dean and Vice President, University Manchester/Chair of the HEATED project), Jacqueline Goodall, University of Leeds , John Robinson, (Chair IST), Bob Hardwick (HEaTED Project Consultant) Matt Levi (HEaTED Project Manager). Venue: Whitworth Hall, University of Manchester . Completed nomination forms should be returned by Friday 2nd May 2008 to: Wendy Mason, Institute of Science & Technology, 90 Rockingham Street , Sheffield S1 4EB or fax: 0114 272 6354 Click here for the flyer:
55% of all accidents in education are caused by a slip or a trip. Last year, almost 2000 major injury slip and trip accidents in the education sector were reported to the Health and Safety Executive, 571 of which were to employees, a 5% rise on the previous year. 90% of major accidents resulted in a broken bone causing considerable personal distress and a significant amount of time away from work. To attend the Health and Safety executives courses follow the links below. Web site - http://www.hse.gov.uk/slips/education/index.htm Events - several events already arranged. To register an interest in attending, fill in the 'contact us' page - http://www.hse.gov.uk/slips/contact.htm
This e-bulletin has been produced by James Lazou, Research Officer for the Higher Education sector. If you have any news items or stories you would like included in the bulletin please contact James at: James.Lazou@unitetheunion.com | |||||||||||
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